Industry moving ahead with oil shale development

Phil Castle, The Business Times

Jeremy Boak

As research and development proceeds in efforts to economically extract oil from shale, issues related to the social and environmental effects, not to mention water use, of commercial-scale production, remain.

But so does the promise of a vast resource whose richest formations of all lie beneath Western Colorado.

“Stopping now would not be a wise thing to do,” says Jeremy Boak, director of the Center for Oil Shale Technology and Research at the Colorado School of Mines.

In his presentation at the Energy Forum & Expo in Grand Junction, Boak reported on the progress of various companies in developing oil shale. “This is an industry that’s moving ahead.”

But Boak also addressed what he considers some of the key issues related to that development.

Oil shale deposits are found all over the world. But the richest formation — the Green River Formation — is found in Colorado, Utah and Wyoming. By one estimate, the formation holds 4.8 trillion barrels of oil, Boak said. The best of the best oil shale is located in the Piceance Basin of Western Colorado, he added.

That vast resource has prompted many energy companies to research ways in which to economically cook oil from shale, Boak said. Most of that research focuses on ways in which to heat the shale in place, or “in situ,” and pump the oil from wells.

While the process has been slow, company are progressing nonetheless, he said. “They’re moving ahead.”

In Utah, Red Leaf Resource has developed what Boak called a “novel technology” in which mined shale is heated in a closed surface impoundment. That process is expected to soon yield oil.

Elsewhere in the world, oil shale production facilities are operating in such countries as Austrailia, Brazil, China and  Estonia.

Back in Colorado, a number of issues persist related to commercial-scale oil shale production, including access to the public lands where oil shale formations are located.

A programmatic evironmental impact statement completed in 2008 would have made a total of about 2.4 million in Colorado, Utah and Wyoming available for potential leasing and development of oil shale and tar sands. Under a second analysis conducted to settle a lawsuit, however, the U.S. Bureau of Land Management changed its preferred alternative and called for a reduction in available land in the three states to 462,000 acres. In Colorado the available acreage would shrink from 346,000 acres to 35,308 acres. “They took out more than 90 percent of the richest oil shale deposits in the world,” Boak said of an option he called “punitive.”

The social and environmental effects of oil shale production present big issues, but ones that can be addressed and mitigated, Board said.

The slower pace of development and regulations on emissions and water quality will help, he added. “Potential environmental impact does not equal certain environmental catastrophe.”

The amount of water required for oil shale production also remains an issue. Boak said he estimated that 1 barrel to 3 barrels of water is needed for every barrel of oil produced. Given the value of oil and the economic effects of an oil shale industry, that ratio constitutes a “pretty good return” on the investment in water, he said. By comparison, much more water is used to grow corn to produce biofuels.